Summary

U.S. foreign policy has not come up often in the 2020 presidential campaign. But when it has, candidates on both sides of the aisle frequently have stressed that U.S. foreign policy should not only keep the American people safe but also deliver more tangible economic benefits for the country’s middle class. The debate among the presidential contenders is not if that should happen but how to make it happen.

All too often, this debate takes place within relatively small circles within Washington, DC, without the benefit of input from state and local officials, small business owners, community leaders, local labor representatives, and others on the front lines of addressing the challenges facing middle-class households. That is why the Carnegie Endowment for International Peace convened a bipartisan task force in late 2017 to lift up such voices and inject them into the ongoing debate. The task force partnered with university researchers to study the perceived and measurable economic effects of U.S. foreign policy on three politically and economically different states in the nation’s heartland—Colorado, Nebraska, and Ohio. The first two reports on Ohio and Colorado were published in December 2018 and November 2019, respectively. This third report on Nebraska has been prepared in partnership with a team of researchers at the University of Nebraska–Lincoln (UNL).

To gauge perceptions of how Nebraska’s middle class is faring and the ways in which U.S. foreign policy might fit in, the Carnegie and UNL research teams reviewed household surveys and conducted individual interviews and focus groups, between July and August 2019, with over 130 Nebraskans in Columbus, Scottsbluff/Gering, Kearney, Lincoln, North Platte, and Omaha.

While those interviewed expressed many different opinions on a broad range of topics, several opinions were repeated often in rural and urban areas alike, in strikingly similar terms.

Prior to the outbreak of COVID-19, the disease caused by the new coronavirus, there was widespread confidence about the state of the U.S. and Nebraska economies but also deep anxiety about how hard it is for working families to sustain a middle-class lifestyle. Virtually everyone interviewed for this study welcomed the low rate of unemployment. They stressed that help wanted signs could be seen throughout the state and that anyone who wanted a job likely could find one. However, like people across Colorado and Ohio, Nebraskans also regularly report mounting financial anxieties about the rising costs of healthcare, education, and housing, in addition to other local concerns more specific to Nebraska: high property taxes, the rampant rate at which retail stores are closing, extreme flooding, and farm consolidation.

There is a lack of information about the U.S. role in the world. As in Colorado and Ohio, working families in Nebraska often find it difficult to determine how their economic interests are affected by most U.S. foreign policies, especially if they are not working in an area that is heavily dependent on what happens overseas. They are focused on their day jobs and meeting their daily expenses. And even when they do pay more attention to the country’s foreign policy, it is difficult to know what to believe amid such politically biased and divisive commentary from media outlets.

There is an erosion of trust in foreign policy professionals (and in the federal government generally). Also similar to Colorado and Ohio, doubts abound in Nebraska that foreign policy professionals in Washington, DC, truly understand the economic realities confronting middle-income households or that they prioritize these realities in the development of U.S. foreign policies.

International trade policy is viewed as the most important aspect of U.S. foreign policy for Nebraska’s middle class, particularly due to its impact on the agricultural production complex. The message was remarkably consistent: the more international trade the better. Nebraskans’ interests on trade seem to be largely aligned, in contrast to Ohio, where past trade policies and globalization have produced winners and losers within the state in far greater numbers, particularly for the large manufacturing workforce. While many Nebraskans expressed strong support for President Donald Trump and his administration’s decision to play hardball with China, and even conveyed a willingness to incur some near-term pain to that end, their views diverged on how much pain they could absorb and whether it would be worth it.

Immigration came up almost as often as trade as a “foreign policy” issue that mattered most to Nebraska’s economy and middle class. Those interviewed sounded a common refrain: the United States needs a streamlined, pragmatic approach to permitting more foreigners willing to work in Nebraska’s unfilled jobs. While Coloradans discussed immigration in similar terms, they did not bring it up nearly as frequently or as forcefully as Nebraskans did. Population decline in rural Nebraska makes the area more dependent on international in-migration to offset workforce shortages. Those interviewed also expressed pride that Lincoln and Omaha hosted high rates of refugees per capita relative to most other U.S. metropolitan areas. That said, they made a distinction between legal and illegal immigration, voiced opposition to the concept of open borders, and spoke openly about cultural challenges that arise with growing immigrant and refugee populations.

Those interviewed generally expressed strong support for peacetime defense spending that keeps the U.S. military strong, even if they evinced no enthusiasm for the United States getting into another major war. The need for a strong national defense overrode economic considerations for them. While Offutt Air Force Base contributes significantly to the economy of the greater Omaha area, defense spending in Nebraska does not benefit the state’s economy nearly as much as it does in Colorado or anchor a regional economy as it does in Dayton, Ohio.

When asked about climate change, those interviewed focused on the near-term impacts of regulatory changes on jobs associated with ethanol production, farming, ranching, and rail transport of coal. Unlike in Colorado, only a minority of interviewees argued that the international fight against climate change should be a top U.S. foreign policy priority.

When interviews were conducted, U.S. foreign aid did not come up that frequently in connection with the economic interests of Nebraska’s middle class. But those interviews were conducted in 2019, long before the outbreak of COVID-19, which originated overseas and rapidly spread around the world and across all fifty U.S. states. The spread has resulted in the worst public health crisis that most Americans have experienced in their lifetimes. In addition to threatening individuals’ lives and physical well-being, the measures required to contain the virus’s spread have totally upended Americans’ social interactions and way of life. And the economic consequences have been devastating, especially for middle-income households contending with business closures and lost wages, higher healthcare and childcare costs, and precipitous declines in their retirement savings. One can assume that, in the wake of this crisis, more Americans, including Nebraskans, will see a connection between the economic interests of America’s middle class and U.S. efforts to strengthen global health security systems to prevent the outbreak and spread of pandemic diseases. At the same time, Americans’ anxieties about globalization and economic relations with China may also be exacerbated by this crisis.

Upon reflecting on the findings across these three different states, it becomes clear that foreign policy professionals need to reexamine how they are defining the national economic interests intended to be advanced through U.S. foreign policy. These case studies reveal that rates of economic growth and unemployment are important but incomplete measures of the economic well-being of the country’s middle class. One must also examine the effects of foreign policy on middle-class jobs, standards of living, and the economic viability of local communities. There must be greater acknowledgment of how these effects diverge in different places. In their upcoming final report, Carnegie’s task force members will evaluate how national economic interests are being defined in the context of what has been learned, as well as propose national-level recommendations.

Acknowledgments

The Geoeconomics and Strategy Program at the Carnegie Endowment for International Peace could not have produced this report without the contributions of many individuals. In particular, it wishes to thank its task force members and university partners. Members of the Carnegie task force (see About the Authors) provided strategic direction to the exercise.

Partners at the University of Nebraska–Lincoln (UNL) provided substance, analysis, and tireless contributions to the report. Jill O’Donnell, with the Yeutter Institute, put together the team and provided key leadership and insights into the state’s international dealings throughout the process. Janell Walther, with the University of Nebraska Public Policy Center, supplied information on state policy issues, as well as organized, led, and analyzed every interview and focus group. Eric Thompson and David Rosenbaum, with the Bureau of Business Research in the College of Business, provided expertise on the state’s economy and contributed to the data for and drafting of the report, with important contributions from Jordan Duffin Wong. Invaluable data collection and interview analysis were also conducted by Tarik Abdel-Monem, Megan Allen, and Nancy Shank through the University of Nebraska Public Policy Center.

Thanks are also due to John Beghin of UNL for reading an early draft of the trade chapter; Edward Balistreri of Iowa State University for sharing his research on the impact of trade policy on Nebraska’s economy; and to both of them for walking the team through their research on state-level impacts of the interaction between the U.S. Department of Agriculture’s Market Facilitation Program and tariffs.

In addition, the Geoeconomics and Strategy Program would like to thank everyone in Nebraska who agreed to be interviewed for the study (see Appendix A for a partial list). Their insights contributed substantially to the case study’s framing and findings. Numerous individuals and offices were instrumental in facilitating interviews and focus groups across Nebraska, including Pat Haverty and the Lincoln Partnership for Economic Development; Robert Drake and the Greater Omaha Chamber; Jeanne Schieffer and the Columbus Area Chamber of Commerce; Doug Kristensen and the University of Nebraska–Kearney, as well as the Kearney Area Chamber of Commerce; Karen Anderson and the Scottsbluff/Gering United Chamber of Commerce; Gary Person and the North Platte Area Chamber of Commerce & Development Corporation; the Nebraska Dry Bean Growers Association; and the Nebraska Association of County Officials.

Appreciation is extended to current and former state and local officials in Nebraska, who were generous with their time and advice. Governor Pete Ricketts and key staff in the Governor’s Office provided critical insights into Nebraska’s economy and international relations. For making time to learn about the case study and sharing relevant information about the state, deep gratitude also goes to Steve Wellman at the Nebraska Department of Agriculture; Cobus Block at the Nebraska Department of Economic Development; and Secretary Robert Evnen, Assistant Secretary Cindi Allen, and Angel Velitchkov at the Nebraska Office of the Secretary of State.

The authors benefited from, and much appreciated, the insightful feedback provided by Derek Chollet, Chuck Hagel, and Darci Vetter on earlier drafts.

The Geoeconomics and Strategy Program is also grateful to Carnegie’s leadership and colleagues in the communications and development teams for their support of this effort, particularly Jen Psaki for participating in task force meetings, Lori Merritt for editing the report, and Jocelyn Soly and Amy Mellon for designing the cover and graphics.

Finally, the program wishes to thank the Bill & Melinda Gates Foundation and the Suzanne & Walter Scott Foundation for making this project possible. The program also gratefully acknowledges UNL’s Institute of Agriculture and Natural Resources, College of Business, and Office of Research and Economic Development for their support of this project.

Many people helped to inform and prepare this report, but the report’s authors alone bear responsibility for its content. The program is grateful to all of them for their flexibility and contributions. As a group effort, the report cannot represent every author’s views in all chapters; some authors preferred different language and emphasis in places.

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